Soybeans Rise as Funds Stay Long After WASDE

By Kirk Maltais

--Soybeans for November delivery rose 1.9% to $9.96 a bushel on the Chicago Board of Trade Friday as the WASDE report gave managed money funds no reason to reduce large long positions on futures.

--Corn for December delivery rose 1% to $3.68 1/2 a bushel.

--Wheat for December delivery fell 1.1% to $5.42 a bushel.

HIGHLIGHTS

Fund Support: Although today's WASDE report from the USDA didn't contain any unexpected bad news, some grains traders are puzzled about the rise in futures -- particularly for soybeans. "Funds are continuing to be in a long position," said Jason Britt of Central States Commodities. However, Mr. Britt notes, he's "hard-pressed to find anything in the report to support that." As of last week's COT report from the CFTC, funds held a net long position of just over 157,000 contracts.

No Shortage: World wheat supplies are on the rise. The USDA this month adjusted its world supply outlook higher due to bigger production in Australia and Canada. World consumption is also on the rise but outweighed by supply growth. Grains traders reacted to this by selling off CBOT wheat futures. "The long and short of it is that there's no shortage of grain," said Don Roose of U.S. Commodities.

INSIGHTS

Grand Totals: Prior to the release of the WASDE Friday, grains futures on the CBOT caught a lift as export sales reported by the USDA this morning were high. Soybean sales for 2020/21 totaled over 3.16 million metric tons, with China responsible for 1.59 million tons. "Beans continue to see unprecedented demand to China with an absolutely massive amount of sales booked on today's export report," said Doug Bergman of RCM Alternatives. However, with the 2019/20 marketing year ending Sept. 1, 2.54 million tons of soybean exports from that year were rolled over into this year. "Therefore soybean export sales were well below expectations," said Terry Reilly of Futures International.

Back to Basics: Now that the September WASDE is out, grains traders will likely turn their focus to fundamentals. "Trade will revert to monitoring global weather forecasts for daily price direction, especially with the start of the Brazilian soybean planting season," said Karl Setzer of AgriVisor.

AHEAD:

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

--The USDA releases its weekly crop progress report for the 2020/21 crop at 4 p.m. ET Monday.

--General Mills releases its earnings for fiscal first quarter 2021 Wednesday.

--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.

Write to Kirk Maltais at [e-mail]